Proposal - The Future of the Arab World: From Job seekers to Job Creators

In December 2010, as its outset, the Arab Spring was non-ideological and leaderless. In many respects, it seemed to be the product of a “generational revolution”: 100 million young Arabs were risi ...

In December 2010, as its outset, the Arab Spring was non-ideological and leaderless. In many respects, it seemed to be the product of a “generational revolution”: 100 million young Arabs were rising against stifling economic and political structures that had stripped them of their freedoms while giving them in return one of the poorest education systems in the world, the highest unemployment rate together with a yawning income gap. Both Tunisia and Egypt demonstrated that rapid economic growth does not buy political stability unless political institutions and public governance are allowed to mature equally rapidly.

Arabreneur is an initiative to accelerate the creation of new jobs through entrepreneurship by creating a model and regional (virtual) eco-system that will leverage all resources currently available in the MENA region.

Background

The Arab Spring, also known as the Facebook/Twitter Revolution, has ushered in an era of unprecedented opportunity and great potential for economic and civil society development throughout the MENA region. The Arab youth of the region are aware of their collective potential, having witnessed first-hand the people power that they wield and can effectively harness through their use of social media. They are ripe with hope for a brighter future for themselves and their countries, emerging as a young, engaged, socially conscious, and extremely tech-savvy segment of the population.

This dynamic youth is both innovative and highly educated, and is actively looking to redefine the region’s technology and social spaces. Around 50% of the current MENA population is below 24 years old and to create a future perspective these youth have to be provided with opportunities to sustain their livelihoods.

Unemployment rates for the non-oil producing economies of MENA average 20 percent, among the highest in the world. Unemployment for those under 25 is over 40 percent, with serious economic/social exclusion and brain drain implications. In addition to that, even in some oil rich countries, the government employs more than 95% of the national workforce. It is therefore that over the next ten years, the MENA region must create over 50 million new jobs to maintain the same unemployment figures according to the OECD. This employment cannot come from traditional companies or government jobs. The real growth can only be realized by creating new companies that will embrace the current regional economic growth opportunities. Entrepreneurship is therefore an important source of job creation that will help the youth of the region to focus their efforts in rebuilding the regions economy and turn them from job seekers to job creators.

On the other hand, the ICT sector in the MENA region today is growing dramatically and creates major opportunities to create an e-economy. With more than 150M Arabic broadband connections in the region and a 26% growth year over year, e-commerce and online services market is growing from 8 Billion USD today to more than 20 Billion USD in the next 3 years. Moreover, more than 50M Facebook accounts are active in the region and the GCC countries show one of the highest smartphone penetrations worldwide. However, the content and applications to drive this e-economy for the mainly Arabic speaking region is lacking behind which portrays an enormous opportunity for high growth entrepreneurs to create their companies and create a significant amount of jobs.

In order to encourage and support the Youth of the MENA region to engage in the creation of SMEs and innovative startups, Arabreneur was created.

ARABRENEUR

ARABANEUR is a not for profit Arab Entrepreneurship initiative aimed at contributing to the development and growth of a socially conscious economy and civil society in the Middle East and North Africa (MENA) region and seeks to emerge as the first full-scale regional enabler.

ARABRENEUR consists of 6 main pillars to create the right eco-system for entrepreneurship and deal-flow in the MENA region that will encourage entrepreneurs to start new companies and investors to support the regional economies:

- Network of Universities, Incubators.

- Regular Bootcamp trainings in different geographic locations across the region

- Acceleration and co-working spaces

- Mentors & Angel Investor networks across the region

- Seed & VC Funds

- ARABRENEUR physical and virtual regional and international network

In general, successful enterprises need a regional or international market to become successful. ARABRENEUR has built a regional MENA Eco-System that provides all aspects for entrepreneurs to grow from an idea to successful exit. This is required not only for the entrepreneur, but also important to create a sustainable investment environment. Today, Arabreneur has facilities in Palestine, Jordan and GCC.

Arabreneur’s aim is to engage young entrepreneurs in their development and provide them with facilities to use their creativity and time to develop startup companies that will provide them economic and social growth. The entrepreneurs will find facilities, mentors and working spaces in various locations in the MENA region where they get support in the setup of their own company.

Arabreneur Process and Elements

The Arabreneur program will encourage student and young professionals to create company ideas through the organization of ideathons, and startup weekends. These events will bring students and young professionals together and help them to generate ideas that can become companies. The goal is to collect more than 1000 ideas per year that can become potential companies. At the end of the events, a jury will select the best ideas.

These ideas will then enroll in one of the quarterly held bootcamps that Arabreneur are conducting based on a proven training model. These bootcamps have been conducted over 30 times in the past year over various countries in the Middle East with the result of over 70 startups that acquired initial investment.

During these bootcamps, the students will receive a one-week intensive training on the essential skills of setting up a company, finance, building a business model, marketing and pitching to investors. After each bootcamp, a pitching event will be held and the best 200 pitches will receive a 5000 - 10000 USD grant to develop their idea to a product.

The process of establishing a company and further develop their ideas into viable products will be executed through the establishment of early-accelerators. The students and young professionals will find facilities, mentors and working spaces in the place where they are studying or living and get support in the setup of their own company. The support of universities in this process is essential in order to create an environment of entrepreneurial behavior and skills development. Mentors from Arabreneur’s local and international network will support the startup with business skills like; Budgets, business plans, marketing plans, organization development and finance.

The Arabreneur Program will establish and furnish co-working spaces where the entrepreneurs can develop their ideas into products that can be marketed. The facility will be managed by an accelerator manager and highly qualified and carefully selected Mentors will provide specialized support to the entrepreneurs as required. Arabreneur will make available through its network of mentors and specialists on a weekly basis week for the entrepreneurs. This early acceleration of a company will be a minimum of 100 days.

After the early acceleration, the most potential concepts will be pitching their companies to the Arabreneur Venture Fund and other Angel investors. Once these companies receive investment, they are immediately eligible for further acceleration in the Arabreneur acceleration facilities. This allows them to receive all the services of the Arabreneur co-working space, mentorship, networking and door-opening services as well as using Arabreneurs facilities all over the MENA region in addition to an international network of accelerators in Europe, North America, Asia and Australia.

Also here, the regional aspect is essential in developing the eco-system. The organization of Angel groups that connect over the region will allow the investment capital that is available in the oil-rich part of the region to also fund the entrepreneurs of the not-oil rich countries.

Network of Incubators, Mentors & Angel Investors

In order to create such an eco-system, ARABRENEUR seeks to partner with existing incubators in the MENA countries to create a pan-MENA network of incubators. ARABRENEUR will assess per country what the existing infrastructure is and will accommodate only the missing elements. Incubators can become affiliated with ARABRENEUR and entrepreneurs that apply with ARABRENEUR will be initially incubated at the existing Incubators. In case no incubators exist in a country, ARABRENEUR will support the setup of an Incubator for that country.

In addition, entrepreneurs require the right mentors to support the different entrepreneurs. These mentors can be local or regional mentors. ARABRENEUR seeks to expand their network of mentors regionally and make them available either via the ARABRENEUR Portal or through "Mentorship Events" that will be organized through which entrepreneurs and mentors will meet in an informal, fun and innovative gatherings.

In order to have a higher success rate for the entrepreneurs that will go through the incubation, ARABRENEUR will expand the regional Angel Network with leading CEO’s, Family Funds and leading investors from the region or who are based in the region/have interest in the region to be part of the Arabia Angel Network. ARABRENEUR will organize regular pitching session for the Angel Investors.

It is essential in this process to guarantee access to finance in this stage of the development. Arabreneur has created valued Angel Investors’ Groups. These groups represent an ideal vehicle for wealthy and highly networked individuals as well as Arab senior executives and other investors to get involved in the evolution of the “Start-Up Nation” in MENA region. Organized Angel Investors’ Groups based on shared interests and vision is a relief to individual Angel Investors from the pain they suffered while preserving the autonomy and independence regarding their investment. Our vision is to have an exclusive group of Angel Investors who will contribute to the MENA entrepreneurial ecosystem through building bridges between start-ups and Angel Investors.

Regional Seed & VC Fund

Initially, to help the entrepreneurs start their incubation a regional Seed & VC Fund needs to be established. ARABRENEUR will provide initial funding for the incubation in country. This can be done either through equity in the company or the setup a foundation that will manage this. The foundation will become a sustainable foundation through exits of the equity, which will be re-used through the foundation for the next entrepreneurs that require funding. After successful early acceleration the VC Fund will invest in viable companies with regional or international growth potential.

ARABRENEUR Portal

Finally, the basis for the eco-system is to create a network of entrepreneurs, incubators, mentors and angel investors. Since the MENA region is a geographically widely spread region, creating a virtual network through a sophisticated portal is the most practical way to enhance communication between entrepreneurs and the eco-system.

The Arabreneur Virtual eco-system portal will have news and useful information on entrepreneurship, trainings and events. In addition it provides a platform for entrepreneurs that have an idea to apply to ARABRENEUR. Once accepted the entrepreneur becomes a member of the ARABRENEUR network and receives a smart card that provide him access to one of the affiliated incubators in his area.

Once the entrepreneur is a member of ARABRENEUR he will be able to use all facilities from ARABRENEUR. He is part of the virtual network that connects all ARABRENEUR entrepreneurs, mentors, angel investors, universities, global networks and global companies together. The virtual network increases the chances and entrepreneurial spirit among all parties in the eco-system. But foremost, it provides a formula that increase the success rate of entrepreneurs and a clear path for the investment cycle which will benefit not only the entrepreneur, but also the investors, universities, regional and global companies and last but not least the MENA countries. This provides a sustainable way for job creation, investment and economic growth.

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